Rwanda is staring at the possibility of missing its $600 million revenue target for mining exports this year, and investors are worried about missing the $800 million target for 2020.
It has all to do with the country’s principal minerals having suffered low prices on the international market. Tin, wolfram, and coltan are fetching way less than they did in 2018.
Tin is selling at $15,700 per tonne on the London Metal Exchange, down from an average of $21,000 last year. Wolfram, coveted by electronic companies, attracts $110 per tonne, down from $180 while the price of coltan was slashed by half from last year and now goes for $0.89 from an average of $1.80 per density.
“It is a bad period and the mining fraternity is feeling the pinch. It will be difficult to achieve the targets set by the government under current prices,” Jean Malic Kalima, president of Rwanda Mining Association told The EastAfrican.
“We have seen some reforms take shape over the years, including a drive towards adding value to the minerals through smelting, so we remain hopeful,” he added.
Rwanda has for long suffered price fluctuations on its minerals mainly due to their low quality.
The country now has one tin smelter, which was dormant for years until the government secured an investor who began operations early this year.
But miners say that even with a smelter, the cost of electricity in Rwanda is still too high to meaningfully lower the cost of adding value to tin exports.
The country has also endeavoured to diversify its minerals to include gold, gemstones and lithium, although these are still exported in small quantities.
In June, the country unveiled a $5 million gold refinery at the Kigali Special Economic Zone, mainly targeting to buy gold from around the region and refine it for export.
Last month, however, the government published mining regulations that had been eagerly anticipated by mining investors.